Why Ferrero is buying Chocos maker Kellogg in a $3 billion deal

Italian confectionery giant Ferrero, best known for brands like Nutella and Kinder, is acquiring century-old U.S. cereal maker WK Kellogg in a deal valued at approximately $3.1 billion.

Ferrero announced on Thursday that it will pay $23 per share for WK Kellogg. The acquisition covers the manufacturing, marketing, and distribution of WK Kellogg Co.’s breakfast cereals across the U.S., Canada, and the Caribbean.

Following the announcement, WK Kellogg's shares surged 30% in premarket trading.


Founded in 1906 in Battle Creek, Michigan, Kellogg is the company behind popular cereals such as Froot Loops, Special K, Frosted Flakes, and Rice Krispies.

WK Kellogg Co. was established in 2023 after Kellogg spun off its snack brands, including Cheez-Its and Pringles, into a separate entity called Kellanova. In a separate move last year, M&M’s maker Mars Inc. said it would acquire Kellanova in a deal worth nearly $30 billion.

Ferrero, founded in Italy in 1946, has been steadily expanding its footprint in the U.S. In 2018, it acquired Nestlé’s U.S. candy business, including Butterfinger, Nerds, and SweeTarts. In 2022, it bought Wells Enterprises, the company behind ice cream brands like Blue Bunny and Halo Top.

Why is the deal happening?
Merger activity in the food sector has been slow this year as US President Donald Trump’s volatile trade policy has created uncertainty for company executives and unsettled consumers, investment banking firm Capstone Partners said.

Shoppers, faced with nearly two years of price increases for cereals, snacks and other foods at grocery stores, have either cut back or switched to less expensive, private-label store brands.

WK Kellogg reported a slump in sales in its first quarter this year because of the “weaker than expected consumption trends”. The company said that sales for the full year would be lower than previously expected, falling as much as 3%.

The combination with Ferrero would give WK Kellogg “greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market”, WK Kellogg CEO Gary Pilnick said.

WK Kellogg was created in 2023 when the Kellogg Company spun it off as an independent company. The larger remaining business, which focused on snacks like Pringles and Cheez-It, was renamed Kellanova.

Mars, the company behind M&M’s and Snickers, agreed last year to acquire Kellanova in a deal valued at $35.9 billion.



The WK Kellogg deal, pending shareholder approval, is expected to close in the second half of the year. Once finalized, WK Kellogg will become a Ferrero subsidiary and its stock will no longer be listed on the New York Stock Exchange.